BoE: mortgage approvals fall to 18-month low

The number of mortgage approvals stood at 60,912 in July, lower than June's total of 64,766 and the average of 68,775 over the previous six months, according to the latest Bank of England Money and Credit Report.

Related topics:  Mortgages
Rozi Jones
30th August 2016
bank of england boe
"A number of potential house buyers seem to have been put off buying in July; what remains to be seen is whether this is in fact the ‘Brexit effect’ or a normal seasonal downturn"

However the number of approvals for remortgaging was 43,084 - above the six month average of 41,887.

Total lending to individuals increased by £3.8 billion in July, down from the six month average of £5.1 billion.

Lending secured on dwellings increased by £2.7 billion in July, down from 3.2 billion in June.

However gross lending secured on dwellings rose slightly from £19.4 billion in June to £19.6 billion in July.

Richard Pike, sales and marketing director of Phoebus Software, commented: “The rise in remortgaging shows that existing homeowners seem to have been positively affected by the cut in base rate last month and the fact that mortgage rates are at an all time low. The same cannot be said for home buyers.

"A number of potential house buyers seem to have been put off buying in July; what remains to be seen is whether this is in fact the ‘Brexit effect’ or a normal seasonal downturn that will pick up in September. I expect there to be a further drop off in August’s figures so we will need to wait until the Autumn to see if this is a pause for breath or the start of a more serious downturn.”

Mark Harris, chief executive of mortgage broker SPF Private Clients, added: "Mortgage lending in July was at an 18-month low, showing a significant decline compared with June. However, July and August are always traditionally quieter times of the year for the market; the real test will come in September when people get back from holiday. Then we will see whether they are making decisions to buy or whether they put these on hold until there is further clarity."

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